TMI Blog2014 (4) TMI 856X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of the liability u/s 43A - the loss claimed on revenue account was allowable u/s 37(1) and the assessee was entitled to adjust the actual cost acquired in foreign exchange in terms of Section 43A - the restatement of the liability itself came at the end of the accounting year on account of the foreign exchange rate fluctuation and thereby the assessee was stated to have been saddled with the loss arising out of the restatement of the liability - the restatement had come at the end of the accounting year and that the present liability itself was on account of the exchange fluctuation – Decided against Revenue. - Tax Case (Appeal) No. 1373 of 2007 - - - Dated:- 4-4-2014 - Chitra Venkataraman And T. S. Sivagnanam,JJ. For the Appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fference between rate prevailing on the day of actual purchase/sale and on the day of payment/realization. Thus, the assessee claimed that the loss thus shown on account of the restatement merited consideration. Since the claim of the assessee was accepted by the Assessing Officer, in exercise of power under Section 263 of the Income Tax Act, 1961, the Commissioner of Income Tax issued proceedings calling upon the assessee to show cause as to why the claim of foreign exchange loss of Rs.39,12,520/- being the difference arising out of restatement of creditors as on 31.03.2000 and Rs.7,52,312/- being restatement of ELB loan repayable taken for purchase of materials should not be raised since both the liabilities related to transaction of ear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, but it however pointed out the argument of the assessee that in the past years, whenever the assessee has made profits on account of such restatement, the same was declared for taxation purposes. Since the profit and loss account were not available, the Tribunal set aside the order of the Commissioner of Income Tax (Appeals) and restored the matter back to the Assessing Officer to consider as to similar system was followed in the earlier year that the profits arising out of such restatement was subjected to tax. 5. Aggrieved by this, the present appeal by the Revenue. 6. In the decision reported in (2010) 322 ITR 180[SC) [Oil and Natural Gas Corporation Ltd., vs. Commissioner of Income Tax], the Apex court considered the issue as r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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